global entrepreneurship monitor (gem) singapore 2006

NUS Entrepreneurship Centre

1

Global Entrepreneurship Monitor StudyGlobal Entrepreneurship Monitor Study GEM 2005GEM 2005

Highlights on Singapore

Global Entrepreneurship Monitor StudyGlobal Entrepreneurship Monitor Study GEM 2006GEM 2006

Highlights on Singapore

FEBRUARY 2007


2

GEM 2006GEM 2006

Singapore Research TeamSingapore Research Team

Prof. Wong Poh Kam Prof. Wong Poh Kam (([email protected]@nus.edu.sg))

Ms. Lena Lee Ms. Lena Lee Ms. Ho Yuen PingMs. Ho Yuen Ping

NUS Entrepreneurship Centre NUS Entrepreneurship Centre


3

GEM Singapore 2006

Overview of GEM Research Methodology


4

Overview of GEM Singapore 2006

An annual GEM cross-national assessment of the level of entrepreneurial activity.

10 countries in 1999, 21 in 2000, 28 in 2001, 37 in 2002, 31 in 2003, 34 countries in 2004 and 2005, and 42 countries in 2006.

For Singapore, this is our seventh year of participation.

NUS Entrepreneurship Centre was invited to carry out the Singapore Country Study since 2000.

Funded by National University of Singapore (NUS) and supported by Action Community For Entrepreneurship (ACE).


5

General NationalFramework Conditions

• Openness (External Trade)• Government (Extent, Role)• Financial Markets (Efficiency)• Technology, R&D (Level, Intensity)• Infrastructure (Physical)• Management (Skills)• Labour Markets (Flexible)• Institutions (Rule of Law)

EntrepreneurialFramework Conditions

• Financial• Government Policies• Government Programmes• Education and Training• R&D Transfer• Commercial, Legal Infrastructure• Internal Market Openness• Access to Physical Infrastructure• Cultural, Social Norms

Social,CulturalPoliticalContext

MajorEstablished Firms

(Primary Economy)

Micro, SmallAnd Medium Firms

(Secondary Economy)

EntrepreneurialOpportunities

EntrepreneursOpportunity / Necessity

EntrepreneurialCapacity• Skills• Motivation

NationalEconomic

Growth(GDP, Jobs)

BusinessChurning

GEM Conceptual Model


6

GEM Research Methodology & Data SourcesGEM employs 3 approaches:

Adult Population Surveys

2000 adults or more were selected in each country for a random sampling survey using a common survey instrument. In Singapore, the survey was carried out in June 2006 (Sample size for Singapore: 4,011)

The results of the analysis are drawn from the responses of the working age group (18 to 64 years old).

This year, a total of 106,495 individuals in 42 countries were surveyed by GEM.


7

GEM Research Methodology & Data Sources

Country Experts Interviews

Up to 50 key informants were interviewed by the GEM national research team in each country in 2006 (36 for Singapore).The key informants include entrepreneurs, investors, government policy makers and venture support professionals.

The informants were asked to assess the environment for entrepreneurship in their country along NINE dimensions:

• Financial Support• Government Policies• Government Programmes• Education and Training• Research and Development Transfer• Commercial and Professional Infrastructure• Barriers to Entry• Access to Physical Infrastructure• Cultural and Social Norms


8

GEM Research Methodology & Data Sources

Collection of Secondary National Social-Economic Data for each country

International benchmark Social-Economic data from World Bank, World Competitiveness Report

National sources of data on venture capital investment, firm formation, etc.


9

Key Indicators of Entrepreneurial Activities in GEM 2006

Total Entrepreneurial Activity (TEA) Rate (Early-Stage Entrepreneurship)• Nascent Start-up vs. New (“Baby”) Businesses• Opportunity vs. Necessity

Other Entrepreneurship Indicators• High Employment Growth Potential TEA rate• Early-Stage Businesses with New Technology• Early-Stage Businesses with New Markets• Early-Stage Businesses with Export Markets• Entrepreneurial Intention Rate• Prevalence of Business Discontinuation (Exit rate)

Financing for new business• Prevalence of informal (business angel) investment


10

Key Indicators of Factors Affecting Entrepreneurship in GEM 2006

Personal Attitudes towards Entrepreneurship• Know someone who has started a business• Perceive the skills to start a business• Perceive good business opportunities• Do not perceive fear of failure as a deterrent

Perception of Social & Cultural Values for Entrepreneurship• Perception of entrepreneurship as a career• Media publicity for entrepreneurship• Preference for uniformity of living standards• Perception of status of successful entrepreneurs

Assessment of National Environment for Entrepreneurial Activities• Rating on 9 dimensions of national environment for entrepreneurship by

selected key informants


11

GEM Singapore 2006

Core GEM Indicators Findings


12

GEM 2006 Singapore – Nascent Start-Up Prevalence Rate* Definition *

This variable attempts to measure the proportion of working age adults (age between 18 to 64 years old) in a country who is actively engaged in starting up a new business.

To meet the criteria for this variable, the respondent had to fulfill each of the following criteria:

if they had done something – taken some action – to create a new business in the past year.

they expected to share ownership of the new firm and

the firm had not paid salaries for more than 3 months


13

GEM 2006 Singapore – New Business Prevalence Rate* Definition *

This variable attempts to measure the proportion of working age adults (age between 18 to 64 years old) in a country who are currently running a new business (as opposed to trying to start one).

To meet the criteria for this variable, the respondent had to fulfill each of the following criteria:

they are currently managing a new business.

they personally owned all or part of the new business.

the firm was started in year 2003 or later (this meant that the business was, at most, 42 months old in June 2006).


14

GEM 2006 Singapore – Total Entrepreneurial Activity (TEA) Or Early-Stage Entrepreneurship

* Definition *TEA is the sum of

(1) the propensity of individuals involving in the start-up process (nascent entrepreneurs) (start-up prevalence rate) and

(2) the propensity of individuals engaging as owner-managers of firms less than 42 months old (new business prevalence rate)

Those that qualified for both are counted only once.


15

GEM 2006 Singapore – Necessity / Opportunity TEA* Definition *

There are two major motivations for individuals to participate in entrepreneurial activities.

(1) “Opportunity Entrepreneurship” - those who voluntarily seek to pursue a perceived business opportunity and

(2) “Necessity Entrepreneurship” - those who become involved in starting up a new business as a last resort, when other options for work or participation in the economy are perceived as absent or are considered unsatisfactory.


16

GEM 2006 Singapore – Total Entrepreneurial Activity (TEA) Or Early-Stage Entrepreneurship

Among the OECD countries falling in the same income band as Singapore (including USA) that participated in both the GEM 2005 & 2006 surveys (16 countries), the overall TEA rate has decreased slightly from 6.4% in 2005 to 5.9% in 2006.

Singapore ranked 16th among the 22 OECD countries with a TEA of 4.9% for 2006, lower than 7.2% in 2005 and 5.7% in 2004.

Among the subset of 21 OECD countries that participated in bothGEM 2005 & GEM 2006, Spore’s relative ranking is lower in 2006 (15th/21) than 2005 (7th/21).


17

GEM 2006 - TEA Prevalence Rate & Rank in OECD

Singapore’s 95% confidence interval is 4.3 to 5.5, hence countries ranked from France to Netherlands are ranked within the same band as Singapore

C ou n try R a te R a n k C ou n try R ate R an k

A U S T R A L IA 1 2 .0 1 D E N M A R K 5 .3 1 3

IC E L A N D 1 1 .3 2 M E X IC O 5 .3 1 4

U N IT E D S T A T E S 1 0 .0 3 F IN L A N D 5 .0 1 5

N O R W A Y 9 .1 4 S IN G A P O R E 4 .9 1 6

G R E E C E 7 .9 5 F R A N C E 4 .4 1 7

C Z E C H R E P U B L IC 7 .9 6 G E R M A N Y 4 .2 1 8

IR E L A N D 7 .4 7 S W E D E N 3 .5 1 9

S P A IN 7 .3 8 IT A L Y 3 .5 2 0

C A N A D A 7 .1 9 JA P A N 2 .9 2 1

H U N G A R Y 6 .0 1 0 B E L G IU M 2 .7 2 2

U N IT E D K IN G D O M 5 .8 1 1

N E T H E R L A N D S 5 .4 1 2 M ea n 6 .2


18

Entrepreneurial Activity Rates – 95% Confidence Interval, persons per 100 Adults, 18-64 years old.

RATES 95% Confidence Interval

Overall TEA 2006 4.9 4.3 – 5.5TEA Opportunity 4.2 3.5 – 4.9 TEA Necessity 0.7 0.5 – 0.9

Consistent with findings from previous years, the majority of early-stage businesses (86%) in Singapore were opportunity-driven.

This is comparable with the 82% average for all GEM OECD countries.


19

GEM 2006 - TEA Prevalence Rate & Rank

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Belg

ium

Japa

nSw

eden Ita

lyU.

Ara

b Em

irate

sG

erm

any

Fran

ceSl

oven

iaSi

ngap

ore

Russ

iaFi

nlan

dM

exic

oSo

uth

Afric

aDe

nmar

kNe

ther

land

s UKHu

ngar

yTu

rkey

Latv

iaCa

nada

Spai

nIre

land

Czec

h Re

publ

icG

reec

eCr

oatia

Norw

ayCh

ileUS

AAr

gent

ina

Indi

aM

alay

sia

Icel

and

Braz

ilAu

stra

liaUr

ugua

yTh

aila

ndCh

ina

Indo

nesi

aJa

mai

caPh

ilipp

ines

Colo

mbi

aPe

ru

Perc

enta

ge o

f adu

ltp p

opul

atio

n be

twee

n 18

-64

year

s


20

TEA (Early-Stage Entrepreneurial Activity) Rate and GDP per capita, 2006

0%

5%

10%

15%

20%

25%

0 10,000 20,000 30,000 40,000 50,000

GDP per Capita 2006, in Power Purchasing Parities (PPP)

Perc

enta

ge o

f pop

ulat

ion

betw

een

18-6

4 ye

ars

Early-stage Entrepreurial Activity (TEA rate) 2006TEA rate United Arab Emirates Fitted 3rd order polynomial - Arab Emirates and Peru excluded

ES

USIS

DK

AU

CA

FI

BE

SEDE

JP

NL

FR

UK

ITSI

GRCZ

HU

ARMY

HR

CLLV

SA

RUMXTR SG

UY

INBR

TH

CN

ID

JA PHCO

UA

IE

NO

FR


21

TEA (Early-Stage Entrepreneurial Activity) Rate and GDP per capita, 2005

0%

5%

10%

15%

20%

25%

30%

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

GDP per Capita 2005, in Power Purchasing Parities (PPP)

Perc

enta

ge o

f pop

ulat

ion

betw

een

18-6

4 ye

ars

Early-stage Entrepreurial Activity 2005 Fitted Polynomial Trend (3rd order)

VE

NZ

HU

HR LV

AR

CL

TH

BR

CN

JM

MX

ZA

USIS

CAAU

SG

SI

ESGR

JP

NOIE

DKSW

B SE

N

F


22

TEA Rate (Early-Stage Entrepreneurship) and GDP per capita

• There is a U-shaped relationship between TEA & GDP per capita across countries, with lower income countries and the very high income countries showing higher TEA rates. For the bulk of relatively advanced economies falling in the income range of about US$25,000- US$40,000 per capita PPP, the TEA rates generally fall within the range of 3-8%

• In 2006, along with Singapore, countries such as UK, Germany, France, Canada, Italy, Sweden, and Belgium reported a fall in its TEA rates in 2006 compared to 2005. In addition the USA also experienced a drop in TEA from 12.4% to 10%.

• For countries that experienced an increase in its TEA rates such as Denmark and Netherlands, the rates are by and large around the 5% level.

• On the other hand, the TEA rates for Australia & Iceland have been exceptionally high at around 10-12%, while Japan’s TEA rates have been consistently low around 2-3% level.

• Singapore’s TEA rates of 5-7% over the years are within the expected range for countries in the per capita income range of US$25,000- US$40,000.


23

TEA (Early-Stage Entrepreneurial Activity) Rate and GDP per capita among nations in $25,000 to $38,000 income bracket, 2005 vs 2006

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

25,000 27,000 29,000 31,000 33,000 35,000 37,000

ESESSG

AU

AU IS ISCA

CAUK UK

NL FI DKDKIT

SG

ITSE

FR DEFI

BE

JPJP BE

NLFR

DESE

2005 2006


24

TEA Rate (Early-Stage Entrepreneurship) and GDP Growth

• The link between GDP growth and TEA rate is complex, but there is some evidence that across OECD countries falling in the same income band as Singapore (US$28,000-US$40,000)*, higher GDP per capita income growth is associated with a drop in TEA rates (Pearson correlation = -.746)

• Likewise, for Singapore over 2000-06, there is a slight negative correlation between GDP growth and TEA rate (-.451)

• There also appears to be some correlation between unemployment rate (+) and wage increase rate (-) and TEA rate

* Excluding Australia and Iceland


25

Pearson Correlations between TEA (Early-Stage Entrepreneurship) and OECD Average

Annual GDP per capita PPP growth

OECD Average GDP per capita PPP Growth

OECD Average TEA

2000 4.43 4.04

2001 1.35 6.43

2002 1.45 5.12

2003 1.42 5.15

2004 2.96 4.89

2005 2.39 5.26

2006 3.12 4.76


26

Pearson Correlations between TEA (Early-Stage Entrepreneurship) and Macro-Economic Factors

Singapore OVERALL TEA

TEA OPPORTUNITY

TEA NECESSITY

GDP growth -0.451 0.117 -0.781*

Unemployment Rate 0.238 -0.340 0.289

Wage Increase -0.645 -0.142 -0.759*

* Significant at the 5% level


27

TEA Rates: Summary FindingsThe 32% overall decrease in Singapore’s TEA from 7.2% in 2005 to 4.9% in 2006 appears to be across all demographic groups, although somewhat higher among males, the young and educated:

– A decrease in New Business Prevalence Rate from 3.7% in 2005 to 2.5% in 2006, and a decreased in Start-up Prevalence Rate from 3.9% in 2005 to 2.7% in 2006. (Note: 0.3% are involved in both new and nascent businesses)

– A decrease in Opportunity TEA from 6.1% in 2005 to 4.2% in 2006, and a decrease in Necessity TEA from 1.2% in 2005 to 0.7% in 2006.

– A decrease in Prevalence of Male TEA from 9.6% in 2005 to 6.0% in 2006, and a decrease in Female TEA 5% in 2005 to 3.6% in 2006.

– A decrease in TEA among individuals in all age-groups, particularly those in the 18-24 years group, which experienced a 52% fall, and those in the 55-64 years group, which experienced a 45 % fall.

– A 49% decrease in TEA among individuals with Secondary and Polytechnic education respectively, a 54% decrease among individuals with JC education, and a 38% decrease among university graduates


28

Summary of Level of Entrepreneurial Activity in Singapore (2000 – 2006)

Source: GEM Master Dataset 2000 - 2006

2000 2001 2002 2003 2004 2005 2006

TEA 4.2 6.6 5.9 5.0 5.7 7.2 4.9

Opportunity TEA - 5.1 4.9 3.9 5.0 6.1 4.2

Necessity TEA - 1.2 0.9 1.0 0.6 1.2 0.7

Male TEA 5.8 9.7 9.3 6.5 8.2 9.6 6.0

Female TEA 2.7 3.6 2.7 3.5 3.4 5.0 3.6

Nascent 2.3 4.2 4.0 3.0 3.0 3.9 2.7

New Business 1.9 2.4 2.0 2.3 2.8 3.7 2.5

Polytechnic 2.9 4.0 4.2 6.4 8.6 11.9 6.1

University 4.0 9.7 4.1 9.6 10.0 11.5 7.1


29

GEM 2006 Singapore –Business Angel Prevalence Rate * Definition *

To meet this criterion for operating as an informal investor (business angel), individuals had to fulfill the following criterion:

they had in the past three years personally provided funds for anew business started by someone else

public traded shares or mutual funds excluded

Among the 22 OECD countries, Singapore is ranked 8th in 2006 compared to 9th/24 in 2005.

Singapore’s informal investment prevalence rate is 3.0% for 2006, slightly lower than 3.5% in 2005 but higher than 2.7% in 2004. (Note: 95% confidence interval for 2006 is 2.2 to 3.8)


30

GEM 2006 – Business Angel Prevalence Rate & Rank in OECD

Singapore’s 95% confidence interval is 2.2 to 3.8, hence countries ranked from Denmark to Canada are ranked within the same band as Singapore

0

1

2

3

4

5

6

7

8

Japa

nHu

ngar

yNe

ther

lands

Unite

d Ki

ngdo

mIta

ly Ge

rman

yIre

land

Mex

icoDe

nmar

kBe

lgium

Swed

enFi

nland

Spain

Aust

ralia

Sing

apor

eGr

eece

Cana

daNo

rway

Fran

ceCz

ech

Repu

blic

Icela

ndUn

ited

Stat

es

Aver

age


31

GEM 2006 – Informal Investor Relationship to Investee

%

CLOSE FAMILY 35.3OTHER RELATIVE 17.7WORK COLLEAGUE 6.8FRIEND or NEIGHBOR 34.6STRANGER 5.6Total 100

Compared to 2005, there is a significant increase in the proportion of family and relative investment


32

GEM Singapore 2006

Other Indicators of Entrepreneurial Activities in 2006

* Key Findings for Singapore *


33

GEM 2006 –High Employment Growth Potential TEADefinition: High Employment Growth Potential (Aspiration) entrepreneurial activity rate is defined as new start-ups that indicated they intend to employ at least 20 people in 5 years. Prior literature has shown that a small proportion of new businesses eventually contribute the bulk of job and value creation in most countries; this indicator seeks to focus on such high growth potential ventures.

Comparatively, a larger proportion of Singapore's entrepreneurial activity i.e. 18% or close to 1 in 5 new start-ups exhibits growth aspiration compared to the average for all OECD countries i.e. 10% or about 1 in 10 new start-ups.

High employment growth potential TEA rate varies from 0.04% for Japan to 2.2% for Iceland.

Singapore’s high employment growth potential TEA rate is 0.9% (vs 1.5% in 2005) (close to 1 in 5 new start-ups), ranking 6th out of the 22 OECD countries, better than its overall TEA ranking (16th out of 22 countries). (Note: 95% confidence interval for 2006 is 0.7 – 1.1)


34

GEM 2006 – High Employment Growth Potential TEA Rate & Rank among OECD Countries

Singapore’s 95% confidence interval is 0.7 to 1.1, hence countries ranked from Denmark to Australia are within the same band as Singapore

Country Rate Rank Country Rate Rank

Iceland 2.2 1 Germany 0.5 13

United States 1.4 2 Hungary 0.5 14

Ireland 1.3 3 Italy 0.5 15

Czech Republic 1.2 4 Sweden 0.5 16

Australia 1.0 5 Finland 0.4 17

Singapore 0.9 6 Spain 0.3 18

United Kingdom 0.7 7 France 0.3 19

Norway 0.7 8 Belgium 0.3 20

Canada 0.7 9 Mexico 0.1 21

Denmark 0.7 10 Japan 0.04 22

Greece 0.6 11

Netherlands 0.6 12 Mean 0.7


35

GEM 2006 – Percentage of TEA (Early-Stage Entrepreneurship) with Latest Technology

* Definition *

Proportion of start-ups and new businesses indicating that they employed the latest technology (technology available since 1 year ago).

11.7% of early-stage businesses in Singapore employed the latest technology compared to the average of 11.2% for all 22 OECD countries.

This ranks Singapore 8th out of 22 OECD countries, ahead of countries such as Sweden, Germany and Iceland.


36

GEM 2006 - Percentage of TEA (Early-Stage Entrepreneurship) with Latest Technology

0

5

10

15

20

25

30

35

40

Spain

Germ

any

Hung

ary

Neth

erlan

ds

Irelan

d

Denm

ark

Unite

d St

ates

Unite

d Ki

ngdo

m

Austr

alia

Japa

n

Swed

en

Cana

da

Icelan

d

Mexic

o

Sing

apor

e

Finlan

d

Fran

ce

Italy

Norw

ay

Belgi

um

Gree

ce

Czec

h Re

publi

c

Aver

age


37

GEM 2006 - Percentage of TEA (Early-Stage Entrepreneurship) with New Markets

* Definition *

Proportion of start-ups or new businesses that sold their products or services to what they believed were entirely new markets.

18.2% of early-stage businesses in Singapore sold their products or services to entirely new markets, compared to the average of 12.4% for all 22 OECD countries.

This ranks Singapore 3rd out of 22 OECD countries.


38

GEM 2006 – Percentage of TEA (Early-Stage Entrepreneurship) with New Markets

0

5

10

15

20

25

30Hu

ngar

y

Japa

n

Czec

h Re

publi

c

Fran

ce

Belgi

um

Austr

alia

Finlan

d

Germ

any

Unite

d Ki

ngdo

m

Unite

d St

ates

Gree

ce

Mexic

o

Neth

erlan

ds

Icelan

d

Irelan

d

Cana

da

Norw

ay

Swed

en

Spain

Sing

apor

e

Italy

Denm

ark

Aver

age


39

GEM 2006 – Percentage of TEA (Early-Stage Entrepreneurship) with more than 75% Export Markets

* Definition *

Proportion of start-ups and new businesses with more than 75% of its actual or intended customers living outside the country i.e. overseas market.

21% of early-stage businesses in Singapore (about 1 in 5 start-ups) have more than three-quarter of its customers living abroad compared to the average of 8.1% (1 in 10 start-ups) for all 22 OECD countries.

This ranks Singapore 1st out of 22 OECD countries, reflecting Singapore’s small domestic market, .


40

GEM 2006 - Percentage of TEA (Early-Stage Entrepreneurship) with more than 75% Export Markets

0

5

10

15

20

25

Italy

Japa

n

Germ

any

Mexic

o

Nethe

rland

s

Unite

d Stat

es

Fran

ce

Finlan

d

Spain

Czec

h Rep

ublic

Hung

ary

Irelan

d

Austr

alia

Unite

d King

dom

Norw

ay

Gree

ce

Cana

da

Icelan

d

Denm

ark

Belgi

um

Swed

en

Singa

pore

Aver

age


41

GEM 2006 – Entrepreneurial Intention Rate* Definition *

Proportion of Adult Population that have not engaged in any start-ups or new businesses but expects to start a new business in the next three years

Includes any type of self employment

May be alone or with others

Singapore’s Entrepreneurial Intention rate is 11.8% in 2006, declined from 17.0% in 2005 (Note: 95% confidence interval for 2006 is 7.9 –15.7)

This ranked Singapore 8th out of the 22 OECD countries, falling slightly from its 4th position out of 24 OECD countries in 2005.


42

GEM 2006 – Prevalence of Entrepreneurial Intention Rate & Rank among OECD countries

Singapore’s 95% confidence interval is 7.9 to 15.7, hence countries ranked from Denmark to France are within the same band as Singapore

Country Rate Rank Country Rate Rank

Iceland 20.0 1 Hungary 9.6 13

Mexico 18.3 2 Canada 8.7 14

France 14.8 3 Denmark 8.2 15

Australia 14.8 4 United Kingdom 7.8 16

Greece 14.0 5 Belgium 7.3 17

United States 13.5 6 Finland 7.0 18

Czech Republic 12.8 7 Germany 6.7 19

Singapore 11.8 8 Spain 6.4 20

Sweden 11.2 9 Netherlands 5.6 21

Norway 10.4 10 Japan 2.4 22

Italy 10.2 11

Ireland 9.8 12 Mean 10.5


43

GEM 2006 – Prevalence of Businesses Discontinuance (Exit Rate)

* Definition *Proportion of Adult Population that has in the past 12 months shut down, discontinued or quit :

A business that was owned and managed by the individual

Any form of self employment

Selling goods and services

Excludes those who sold off businesses

Singapore’s business discontinuance rate in 2006 is 2.2% (2.3% in 2005), ranking 10th among the 22 OECD countries.


44

GEM 2006 – Prevalence of Businesses Discontinuance (Exit Rate)

0

1

2

3

4

5

6

7

8

Neth

erlan

ds

Belgi

um

Hung

ary

Japa

nSp

ain Italy

Irelan

dDe

nmar

kGe

rman

yFi

nland

Unite

d Ki

ngdo

mSw

eden

Sing

apor

eCa

nada

Unite

d St

ates

Gree

ceNo

rway

Icela

ndFr

ance

Czec

h Re

publi

cAu

stra

liaM

exico

Aver

age


45

GEM 2006

Personal Attitudes of Singaporeans Toward Entrepreneurship


46

GEM 2006 – Attitudes and Perceptions of Singaporeans towards Entrepreneurship

26.3% of adult population surveyed know someone who has started business, lower than 31.3% in 2005 and the OECD average of 36.3%.

25.4% of those surveyed perceived to have the skills to start a business, lower than 29% in 2005 and the OECD average of 41.1%.

15.7% of those surveyed between 18 – 64 years old perceived good business opportunities, lower than 17.5% in 2005 and the OECD average of 34.1%.

In terms of fear of failure, 65.6% do not perceive fear as a deterrent, compared to the OECD average of 65.0%. This represents a slight increase from 61.5% in 2005.


47

Source: 1) GEM 2006 Adult Population Survey2) GEM 2006 Master Dataset

GEM 2006 – Attitudes and Perceptions of Singaporeans Towards Entrepreneurship

Entrepreneurial Population Attitude Ratings(Source: Adult Population Survey, Rating %of answering “Yes”)

SG SG ALL 22 GEM OECD COUNTRIES (2006)

2005 2006 MeanHigh

Score (Ctry)

Low

Score (Ctry)

Know someone who started a business 31.3% 26.1% 36.3% 60.8% (IS) 26.1% (SG)

Have skills to start a business 29.0% 25.4% 41.1% 53.2% (CA) 15.7% (JP)

Perceive good start-up opportunities in next 6 months 17.5% 15.7% 34.1% 64.6% (DK) 9.2% (JP)

Fear of failure is not a deterrent 61.5% 65.6% 65.0% 79.0% (US) 42.2% (GR)


48

GEM 2006

Indicators of Social & Cultural Values for Entrepreneurship


49

GEM 2006 – Starting Business is a Good Career Choice *Definition*

Proportion of Adult Population that perceives starting a business is a good career choice.48.2% (vs 46.8% in 2005) of Singaporeans perceive that starting a business is a good career choice, compared to an average of 57.8% (55.4% in 2005) in the OECD countries.This ranked Singapore 19th out of 22 countries (18th/24 in 2005).


50

GEM 2006 – Starting Business is a Good Career Choice in OECD Countries

0

20

40

60

80

100

Japa

nFi

nland

Belgi

umSi

ngap

ore

Mex

icoSw

eden

Unite

d St

ates

Denm

ark

Unite

d Ki

ngdo

mHu

ngar

yGe

rman

yAu

stra

liaNo

rway

Gree

ceFr

ance

Czec

h Re

publi

cIc

eland

Irelan

dSp

ainCa

nada Italy

Neth

erlan

dsAv

erag

e


51

GEM 2006 - New Business Success is High Status *Definition*

Proportion of Adult Population that perceives starting a new business provides high level of status and respect.

54.1% (vs 57.8% in 2005) of Singaporeans believe that new business success is accorded with high status in this country, compared to an average of 65.2% (66.2% in 2005) in the OECD countries.

This ranked Singapore 17th among the 22 countries (21st/24 in 2005).


52

GEM 2006 - New Business Success is High Status in OECD Countries

0

20

40

60

80

100

Japa

nCz

ech

Repu

blic

Unite

d St

ates

M

exico

Belgi

umSi

ngap

ore

Spain

Swed

enNe

ther

lands

Gree

ceHu

ngar

yFr

ance

Norw

ay Italy

Cana

daAu

stra

liaIc

eland

Unite

d Ki

ngdo

mDe

nmar

kGe

rman

yIre

land

Finla

ndAv

erag

e


53

GEM 2006 – Media Publicity for New Business *Definition*

Proportion of Adult Population that perceives there is sufficient media publicity for new businesses.

60% (vs 70.2% in 2005) of Singaporeans perceive that there is sufficient media publicity for new businesses, compared to an average of 55.3% (54.7% in 2005) in the OECD countries.

This ranked Singapore 8th out of the 22 countries (6th/24 in 2005).


54

GEM 2006 – Media Publicity for New Business in OECD Countries

0

20

40

60

80

100

Hung

ary

Denm

ark

Belgi

um

Fran

ce

Gree

ce

Spain Italy

Germ

any

Mex

ico

Japa

n

Unite

d St

ates

Unite

d Ki

ngdo

m

Swed

en

Neth

erlan

ds

Sing

apor

e

Czec

h Re

publi

c

Aust

ralia

Finla

nd

Cana

da

Norw

ay

Icela

nd

Irelan

d

Aver

age


55

GEM 2006 – Uniform Living Standards *Definition*

Proportion of Adult Population that prefers a uniform living standard.

53% (vs 51.5% in 2005) of Singaporeans prefer a uniform living standard, compared to an average of 63% (60.1% in 2005) in the OECD countries.

This ranked Singapore 19th out of 22 countries (19th/24 in 2005).


56

GEM 2006 – Preference for Uniform Living Standards in OECD Countries

0

20

40

60

80

100

Japa

n

Denm

ark

Unite

d St

ates

Sing

apor

e

Mex

ico

Neth

erlan

ds

Fran

ce

Swed

en

Icela

nd

Belgi

um

Spain

Gree

ce

Czec

h Re

publi

c

Finla

nd

Germ

any

Norw

ay

Hung

ary

Aust

ralia

Unite

d Ki

ngdo

m

Cana

da Italy

Irelan

d

Aver

age


57

GEM Singapore 2006

Assessment of National Environment for Entrepreneurship


58

9 Dimensions of Entrepreneurial Environment

• Financial Support• Government Policies• Government Programmes• Education and Training• Research and Development Transfer• Commercial and Professional Infrastructure• Barriers to Entry• Access to Physical Infrastructure• Cultural and Social Norms

Each dimension is measured using several sub-indicators


59

Source: Singapore Expert surveys 2000-2006

2000 2001 2002 2003 2004 2005 2006

Entrepreneurs 17 6 18 11 16 19 18

Policy Makers 12 9 4 8 4 3 0

Investors 6 5 7 6 9 8 0

Venture Support 4 11 7 8 7 6 18

Total 39 31 36 33 36 36 36

Breakdown of Key Informants – 2000 - 2006


60

(A) Financial Support

A01 – In my country, there is enough equity funding available for new and growing firms.A02 – In my country, there is enough debt equity for new and growing firms.A03 – In my country, public subsidies have a major impact promoting firm creation and growth.A04 – In my country, private individuals (other than founders) are an important source of financial support for new and growing firms.A05 – In my country, venture capitalists are an important source of private support for new and growing firms.A06 – In my country, initial public offerings (IPO) are an important source of equity for new and growing firms.

Entrepreneurship Environment –Financial Support

-2

-1

0

1

2

A 01 A 02 A 03 A 04 A 05 A 06

2000 2001 2002 2003 20042005 2006


61

Entrepreneurship Environment – Dimension on Cultural Norms(I) Cultural and Social Norms

I01- In my country, the national culture is highly supportive of individual success achieved through own personal efforts.I02- In my country, the national culture emphasises self-sufficiency, autonomy, and personal initiative.I03- In my country, the national culture encourages entrepreneurial risk-taking.I04- In my country, the national culture encourages creativity and innovativenessI05- In my country, the national culture emphasises the responsibility that the individual (rather than the collective) has

in managing her own life.

-2

-1

0

1

2

I01 I02 I03 I04 I05

2002 2003 2004 2005 2006


62

GEM 2006Singapore’s Entrepreneurial Environment Scoreboard

* Only 18 OECD countries (including Singapore) provided data on the entrepreneurship environment ratings by country informants.

Entrepreneurship Environment Ratings by Country Informants (Source: Country Expert Survey; Scale 1 = Low to 5 = High)

SG 18 GEM OECD Countries (2006)*

ITEM 2005 2006 Mean High

Score (Ctry)Low

Score (Ctry)

Availability of capital 3.1 3.5 2.9 3.9 (US) 2.3 (IE)

Government policy support 3.5 3.5 2.7 3.5 (SG) 2.0 (HU)

Low regulation and taxation burden 4.0 3.8 2.7 4.0 (IS) 1.5 (IT)

Government program effectiveness 3.4 3.4 3.0 3.5 (DE) 2.3 (HU)

Effectiveness of primary & secondary education & training 2.6 3.1 2.4 3.1 (SG) 1.8 (DE)

Effectiveness of university & mgmt. education & training 2.9 3.3 2.9 3.7 (US) 2.2 (DK)

R&D transfer effectiveness 3.0 3.2 2.7 3.2 (SG) 2.4 (NL)

Business service effectiveness 3.4 3.5 3.4 4.0 (US) 2.8 (MX)

Rapidity of change in markets 2.8 3.1 2.7 3.5 (IS) 1.9 (FI)

Market accessibility 3.0 3.3 3.0 3.4 (NL) 2.4 (MX)

Ease of access to physical infrastructure 4.7 4.6 4.0 4.7 (US) 2.8 (IT)

Cultural value placed on independence 3.0 3.5 2.9 4.5 (US) 2.3 (HU)


63

GEM 2006 - Overall Assessment of Singapore’s Environment for Entrepreneurship

• The expert informants’ ratings on all entrepreneurship environment indicators in 2006 were above the averages of the 18 GEM OECD countries

• Singapore was rated the highest on three attributes– “effectiveness of primary & secondary education & training” (3.1), “government policy support” (3.5), and “R&D transfer effectiveness” (3.2).

• Singapore is also near the top among the surveyed countries in terms of “government programme effectiveness” (3.4), “market accessibility” (3.3), and “ease of access to physical infrastructure” (4.6).

• Overall, in comparison with 2005, the ratings of Singapore’s environment for entrepreneurship in 2006 appear to have generally improved on most dimensions, and stayed more or less constant for a small number of dimensions (“government policy support”, “government programme effectiveness”, and “ease of access to physical infrastructure”, and “regulation and taxation burden”).


64

GEM Singapore 2006

Conclusions


65

Conclusions

Entrepreneurial activity levels across the 16 participating member countries of the (OECD) group falling in the same income band as Singapore (including USA) have dropped from an average of 6.4% in 2005 to 5.9% in 2006.

Consistent with this observed decline trend in the OECD countries with the same income bracket as Singapore, Singapore’s early-stage entrepreneurial level, as measured by the Total Entrepreneurial Activity (TEA) rate, also decreased from 7.2% in 2005 to 4.9% in 2006.

The data for the OECD countries show that the bulk of relativelyadvanced countries in the US$25,000-US$40,000 per capita range reported TEA rates in the 3% to 8% region, with the mean clustering around 5%.

The fall in Singapore’s TEA rate in 2006 is likely to be partly due to favourable GDP and employment growth. The majority of OECD countriesalso experienced a decline in TEA rates between 2005 and 2006.


66

ConclusionsCompared to the average level of GEM OECD countries, Singapore fared

better in terms of start-ups that are technology-oriented, intended to penetrate new markets and overseas market, and have higher employment growth aspiration.

The assessment of Singapore’s environment for entrepreneurship showed improvement across most environmental indicators, particularly the availability of capital for start-ups and the effectiveness of education and training programmes.

Compared to the other OECD countries participating in the GEM, Singapore received higher ratings on all the indicators.

Unlike lower income countries or countries with unfavourable policy environment, Singapore’s challenge may be one of coping with the paradox of success, resulting in high perceived opportunity cost of starting up on one’s own and a social norm less supportive of entrepreneurship.

A key policy focus should be on promoting high tech and innovative startups that can internationalize, not just start-ups in general


67

The full Singapore report can be downloaded from the NUS Entrepreneurship Centre website: www.nus.edu.sg/nec

To download Global Executive report, GEM website: www.gemconsortium.org.sg

global entrepreneurship monitor (gem) singapore 2006

Business

singapore gem

entrepreneurship preference

entrepreneurship ace

gem national research

singapore research team

singapore country study

core gem indicators

new markets